Businesses operating Trans-Tasman face the dual challenge of complying with Australian Sustainability Reporting Standards (ASRS) and New Zealand's Climate-Related Disclosures (CRD).
But are they really that different, or is there a way to simplify the process? As we step into 2025, ASRS remains unfamiliar territory for many sustainability professionals. On the other hand, CRD has been in effect since 2023 and offers valuable lessons for Australia's new regulations.
At BraveGen, we’re supporting companies like Ryman Healthcare and WINC/OfficeMax as they navigate the dual challenge of complying with both frameworks.
Here, we’ll delve into the key challenges, similarities, and differences between ASRS and CRD, offering insights to help your organisation navigate this multifaceted regulatory environment.
ASRS marks a significant shift in Australia’s approach to sustainability reporting. Aligned with international frameworks such as the Task Force on Climate-related Financial Disclosures (TCFD), ASRS mandates the disclosure of environmental, social, and governance (ESG) metrics, with an initial focus on large corporations (Group One) and eventual trickle-down to smaller entities.
Key ASRS features include:
CRD has been in effect since 2023, placing rigorous reporting requirements on large financial institutions and publicly listed companies. Similar to ASRS, CRD also draws heavily from TCFD guidelines but emphasises immediate compliance and action. Key CRD features include:
Not everything is as daunting as it seems. Here’s the silver lining: the differences between the two regimes are like the branches of a tree. While they may spread in slightly different directions, they all stem from the same sturdy trunk.
Beneath the surface, the roots—representing the core processes and data requirements—are intertwined and anchored in the International Sustainability Standards Board (ISSB) standards.
These shared foundations create a strong base, supporting the varied disclosures and ensuring consistency, even as the frameworks diverge in their visible aspects.
The key is to grasp the differences and create processes that can adapt to these complexities.
The New Zealand and Australian climate disclosure regimes target different entities, with New Zealand focusing on financial entities such as listed companies, licensed banks, insurers, and fund managers, reflecting an expectation that impacts will flow through the financial system.
In contrast, Australia’s requirements are more broadly applicable, targeting incorporated companies exceeding certain size thresholds.
These distinctions mean companies in both regions may need to disclose varying levels of detail, creating unique challenges in materiality for trans-Tasman businesses striving for compliance.
The differing scopes of the regimes can lead to variations in what qualifies as material information. For companies operating under both frameworks, such as a New Zealand-based parent with an Australian subsidiary, the Australian regulations may require more detailed disclosures than those mandated in New Zealand.
Scenario analysis requirements also vary, with New Zealand mandating three scenarios (1.5°C to 3°C or greater and the choice of a third scenario) and Australia two (1.5°C and above 2.5°C).
GHG measurement is another point of divergence, as Australia mandates the GHG Protocol or their local NGER Determination, while CRD allows flexibility in methodology and measurement.
Assurance requirements are more limited in New Zealand, covering only GHG emissions inventory. ASRS plans a phased approach to more comprehensive assurance.
Lastly, Australia has a more gradual approach to director liability, offering a transition period with safe harbour relief in the first three years, which differs from the approach in New Zealand.
Many sustainability professionals navigating trans-Tasman climate disclosures have noted that the core requirements are largely aligned.
Still, adjustments in methodologies and timelines are essential to meet the nuances of each framework.
These adaptations ensure data and analysis align with the specific expectations of ASRS while leveraging insights from CRD. Therefore, you can't simply transfer your New Zealand climate risk disclosure report to meet the requirements of other jurisdictions just yet.
Open dialogue and collaboration across borders have become vital in this journey, fostering a shared learning process as reporting practices evolve. Here are the key challenges to consider:
While CRD is already enforced, ASRS is still in its rollout phase, creating a mismatch in compliance timelines. Sustainability managers must juggle:
This creates a burden for companies that need to synchronise data collection, reporting cycles, and compliance efforts across jurisdictions.
Scope 3 emissions pose significant challenges under both frameworks. For Trans-Tasman companies:
Nick Ross, an experienced sustainability consultant, emphasises, “Engaging the supply chain early is essential. Companies need a structured approach to collect reliable data and document assumptions for auditors.”
Many companies in Australia have already taken significant steps in supply chain engagement due to modern slavery requirements.
For example, under the Australian Modern Slavery Act 2018, over 3,000 large companies are now required to assess and address the risks of modern slavery in their operations and supply chains, driving an industry-wide shift toward greater transparency and collaboration.
Supply chain engagement and collaboration are emerging as broader themes in corporate responsibility, with issues like modern slavery and Scope 3 emissions highlighting the need for a unified approach to tackle global challenges.
Companies with operations spanning Oceania face a steep learning curve to align their reporting practices. Key hurdles include:
Effective reporting across frameworks demands robust systems. Many organisations still rely on spreadsheets, which are inadequate for handling the complexity and frequency of ASRS and CRD reporting.
Nick notes, “Investing in technology is critical. Companies must move beyond spreadsheets to leverage tools that ensure transparency, accuracy, and efficiency.”
While ASRS and CRD present unique challenges, they also share commonalities that can guide sustainability managers:
Both ASRS and CRD adhere to TCFD’s core principles, including:
By aligning processes with TCFD, companies can streamline efforts and reduce duplication.
Both frameworks emphasise not just compliance but actionable climate strategies, including:
Transparency is a cornerstone of ASRS and CRD, reflecting growing pressure from investors, regulators, and customers. For sustainability managers, this is an opportunity to enhance trust and drive brand value through credible reporting.
The demands of ASRS and CRD reporting bring challenges, but they also position Trans-Tasman organisations to spearhead sustainability efforts. Adopting certain strategies will help along the way. Here are our top tips:
Adopt integrated platform solutions to manage reporting efficiently.
Proactively collaborate with supply chains to:
Work with sustainability consultants who understand the nuances of both frameworks. Their guidance can:
Rather than treating the frameworks as separate obligations, develop a unified sustainability strategy that:
As Nick Ross puts it, “Sustainability reporting isn’t just about meeting obligations—it’s about future-proofing your business. The sooner you start, the better prepared you’ll be.”